When dealing with the Internal Revenue Service during the initial stages of a tax case, whether it involves an audit, collection issue, request for penalty relief, or a proposed plan of resolution such as an Offer In Compromise, taxpayers as well as tax professionals often overlook the right to resolution through the use of the …
The IRS Announces Updated Limitations Related to Employer Plans for 2021
The IRS announced cost of living adjustments affecting dollar limitations for employer plans for tax year 2021. Most IRS limits impacting employer retirement plans have remained the same because the increase in the cost-of-living index did not meet the legal thresholds that trigger their adjustment. See IRS Notice 2020-79 and IRS Revenue Procedure 2020-32 for additional IRS technical guidance. …
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IRS Announces No Information Returns to be Filed for PPP Loan Forgiveness
Under the Paycheck Protection Program (“PPP”) established by the CARES Act, a borrower is eligible for forgiveness of all or a portion of the principal amount of a loan made in accordance with the PPP if certain conditions are satisfied (“qualifying forgiveness”). While the Internal Revenue Code generally requires a borrower to include the amount …
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IRS Guidance on Retirement Plan Qualified Birth or Adoption Distributions
The Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”) established a new in-service distribution known as a qualified birth or adoption distribution (“QBOAD”). Generally, a QBOAD is any distribution of up to $5,000 from an “eligible retirement plan” (other than a defined benefit plan), made to an individual during the one-year …
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IRS Grants Relief for 2020 RMDS
The IRS recently granted additional relief for retirement account owners due to Covid-19. Generally, when a person attains age 72 (previously age 70 ½) that person is required to begin taking required minimum distributions (“RMDs”) from their retirement account each year based on their life expectancy. Individuals with inherited IRAs are required to take annual …
Tax Tip for Tax-Exempt Hospitals: IRS Relief for the Community Health Needs Assessments Requirements
Recognizing the increased burdens that the COVID-19 pandemic has placed on hospitals, the IRS has relaxed its deadline for meeting the Community Health Needs Assessments (CHNA) requirements per Internal Revenue Code Section 501(r)(3). See Notice 2020-56. To maintain their tax-exempt status, non-profit entities that operate hospitals must meet additional requirements, one of which relates to …
Cancellation of Non-Qualified Plan Deferral Election Due to a Coronavirus-Related Distribution
In general, a participant must make a deferral election to a non-qualified deferred compensation plan before the beginning of the plan year and the election must remain in effect for the entire plan year. Participants made their deferral elections by December 31, 2019 to calendar year plans, before anyone knew how impactful the COVID-19 virus …
The Good Parts of the New Rules Regarding Distributions from IRA and Plan Interests
The SECURE ACT (Setting Every Community Up for Retirement Enhancement Act) was included as part of the massive December 2019 appropriations bill. The inclusion of the Act was a stealthy surprise, since most thought that it had been taken off the table earlier that year. For the most part, the new rules are effective for …
Spousal Tax Relief
Taxpayers should be aware that by signing a joint tax return with your spouse, you are jointly and severally (individually) responsible for any tax, interest, and penalties that arise from that return. The IRS can pursue collection from either you or your spouse (or former spouse). However, you may be absolved of part or all …
IRS Provides Details on the Extension of the April 15 Filing Date
In a series of FAQ’s issued on March 24, the IRS has provided additional information on the extension of the April 15 tax deadline announced in response to the COVID-19 pandemic. As mentioned in a prior tax blog prepared by Dickinson Wright, the IRS has provided an automatic extension to July 15, 2020 of Federal income tax returns and …
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